The 50-Year Evolution of Gold Prices | Can the Historic Highs Continue for the Next Half Century?

Gold, as the oldest precious metal in human civilization, has always played the role of a store of wealth and a vessel of value. Its high density, excellent ductility, and antioxidant properties make it not only suitable for financial transactions but also widely used in jewelry, industrial fields, and more.

Over the past half-century, gold prices have experienced multiple fluctuations, but the overall trend has been upward, especially after 2024, when gold prices repeatedly hit new all-time highs. But can this 50-year upward cycle continue into the next 50 years? How should gold prices be interpreted? Is it more suitable for long-term holding or swing trading?

Retrospective of the Highest Gold Price Record｜50 Years of Astonishing Growth

Starting from the detachment from the US dollar in 1971

The modern gold market can trace its origins back to 1971. Before that, international trade used the Bretton Woods system, with the US dollar linked to gold at 35 USD per ounce, making the dollar essentially a gold exchange certificate.

However, as global trade rapidly developed, gold mining could not keep pace with demand growth, coupled with large outflows of US gold reserves. President Nixon finally announced the detachment of the dollar from gold in August 1971. This marked the end of the Bretton Woods system and ushered in a new era of the modern gold market.

Astonishing Growth Data

From 1971 to now, gold prices have risen from 35 USD per ounce to over 4000 USD in 2025, an increase of over 120 times. Notably, 2024 witnessed an epic rally in gold—annual gains exceeding 104%, with October breaking the key level of 4300 USD per ounce for the first time.

In comparison, the Dow Jones Industrial Average rose from about 900 points to 46,000 points during the same period, an increase of about 51 times. This indicates that gold, as a long-term investment tool, can deliver returns comparable to the stock market.

In-Depth Analysis of Four Major Upward Cycles

First Wave: 1970-1975, from detachment to oil crisis

After the dollar-gold detachment, international gold prices surged from 35 USD to 183 USD, an increase of over 400%.

This rise was driven mainly by two forces: first, public confidence in the dollar wavered after the detachment—since the dollar could no longer be exchanged for gold, people preferred holding physical gold for preservation; second, the oil crisis erupted, prompting the US to significantly increase money issuance to buy oil, further pushing up gold prices. But as the oil crisis eased, public perception of the dollar’s utility recovered, and gold prices fell back to around 100 USD.

Second Wave: 1976-1980, geopolitical factors pushing gold higher

Gold prices broke through from 104 USD to 850 USD, an increase of over 700%, lasting about three years.

This rally was triggered by the second Middle East oil crisis and global geopolitical turmoil—major events like the Iran hostage crisis and the Soviet invasion of Afghanistan intensified the world economic downturn, soaring inflation, and made gold the preferred safe haven. However, this rapid increase was followed by a swift correction after the crises eased and the Soviet Union disintegrated. Over the next 20 years, prices mostly oscillated between 200-300 USD.

Third Wave: 2001-2011, a decade-long bull market

International gold prices soared from 260 USD to 1921 USD, an increase of over 700%, lasting a full 10 years.

The 9/11 terrorist attacks triggered this rally. To fund the massive anti-terrorism efforts, the US government began cutting interest rates and issuing bonds, leading to rising housing prices and eventually the 2008 financial crisis. To rescue the market, the Federal Reserve implemented quantitative easing(QE), causing gold prices to continue climbing, reaching a peak of 1921 USD/oz during the European debt crisis in 2011. Subsequently, under EU intervention and World Bank rescue, gold prices gradually stabilized around 1000 USD.

Fourth Wave: 2015-present, a new decade high

In the past decade, gold entered a new upward cycle. From 2015 to 2023, gold prices broke through the 2000 USD mark from 1060 USD. Factors driving this include negative interest rate policies in Japan and Europe, the global de-dollarization trend, the US’s renewed QE in 2020, the Russia-Ukraine conflict in 2022, and the Israel-Palestine war and Red Sea crises in 2023.

Entering 2024-2025, gold’s rally has become even more spectacular. In early 2024, gold prices surged strongly, breaking 2800 USD in October to set a new record. Market consensus attributes this mainly to US economic policy risks, central banks increasing gold reserves, and geopolitical turmoil.

Since 2025, factors such as escalating Middle East tensions, changes in Russia-Ukraine conflict, US tariff policies causing trade concerns, global stock market volatility, and a weakening US dollar index have jointly driven gold prices to new heights repeatedly.

Is Gold Worth Investing In? Return Rate Comparison Analysis

50-Year Return Comparison

• Gold: up 120 times from 1971 to 2025
• Stock market (Dow Jones): up 51 times from 1971 to 2025
• Conclusion: Long-term returns of gold outperform stocks

Since 2025, gold has risen from 2690 USD/oz at the start of the year to around 4200 USD/oz, a gain of over 56%, showing excellent performance.

Core Issue in Gold Investment

However, as previously analyzed, gold prices do not rise in a smooth linear fashion. For example, between 1980-2000, gold was in a long-term consolidation between 200-300 USD, yielding no returns for 20 years. How many 50-year periods can one wait in life?

Therefore, gold is more suitable for swing trading rather than simple long-term holding. Additionally, since gold is a natural resource, mining costs increase over time. Historically, each bullish cycle’s bottom price has been gradually rising, indicating that even after a bull market ends and prices pull back, they won’t fall to worthless levels. Recognizing this pattern is key to profiting from gold investments.

The Profit Logic of Gold, Stocks, and Bonds

The sources of returns for these three investment tools are fundamentally different:

• Gold: Returns come from “price difference,” no interest generated, relies on timing of entry and exit
• Bonds: Returns come from “coupon payments,” requiring continuous increase in holdings to boost interest income
• Stocks: Returns come from “corporate growth,” based on long-term corporate expansion

In terms of investment difficulty: bonds are the simplest, gold is next, stocks are the most challenging.

Looking at the past 30 years’ yields: stocks are the best, followed by gold, then bonds.

The secret to making money investing in gold lies in grasping the rhythm of the market—typically a long bull run, followed by a sharp decline, then a stabilization period, and finally a new bull phase. If you can go long during the bull and short during sharp dips, your returns will far surpass bonds and stocks.

Complete Guide to Gold Investment Tools

1. Physical Gold

Direct purchase of gold bars and other physical gold. Advantages include asset concealment and the ability to wear jewelry; disadvantages are inconvenient trading and long realization cycles.

2. Gold Passbook

Gold custody certificates, with holdings recorded in a passbook. You can withdraw physical gold anytime or deposit physical gold. Advantages are portability; disadvantages include no interest from banks, large bid-ask spreads, suitable mainly for long-term investment.

3. Gold ETFs

Exchange-traded funds tracking gold prices, with high liquidity and easy trading. After purchase, you hold corresponding shares representing the amount of gold held. Disadvantages include management fees gradually eroding returns; if gold prices remain stable long-term, assets will slowly shrink.

4. Gold Futures/Contracts(CFD)

This is the most commonly used financial instrument by retail investors. Advantages include:

• Leverage trading to amplify gains
• Both long and short positions
• Very low costs, especially for CFDs
• Higher capital efficiency and greater flexibility

For short-term swing traders, gold futures or CFDs are more suitable choices.

The Golden Rules of Economic Cycles and Asset Allocation

Asset performance patterns during good and bad economic periods

Growth periods: corporate profits improve, stocks tend to rise; bonds and gold are relatively less favored.

Recession periods: corporate profits decline, stocks lose appeal; gold’s hedging function and bonds’ fixed income become the preferred safe havens.

Investment Portfolio Recommendations

In today’s rapidly changing markets with frequent major geopolitical events (such as Russia-Ukraine war, inflation hikes, etc.), the most prudent approach is to allocate assets reasonably among stocks, bonds, and gold based on individual risk appetite and investment goals.

Holding different asset classes can offset each other’s volatility risks, building a more resilient portfolio.

Gold’s over 120-fold increase in 50 years has proven its long-term value. But to truly profit from gold investment, the key lies in understanding its price cycle patterns, choosing appropriate trading tools, and making correct decisions at the right times.